Economics 358 (E & W Focus Designation) Environmental Economics - Fall 2015

Transcription

1 John Lynham University of Hawaii Economics 358 (E & W Focus Designation) Environmental Economics - Fall 2015 Special Topic for Study Abroad in Paris Fall 2015: ENVIRONMENTAL POLICY IN THE EUROPEAN UNION COURSE DESCRIPTION AND READING LIST I. COURSE DESCRIPTION Course Focus: This course examines sources of and remedies for environmental problems in industrialized and developing countries. We focus on the economic underpinnings of important environmental problems and on ways that public policies can solve some of these problems. The European Union has been at the forefront of using economic incentives and market-based policies to solve environmental problems. We will explore how theoretical concepts have been implemented in practice in the EU through the examination of Sarkozy s ecotaxe, the EU Emissions Trading Scheme/System, Ireland s pay-by-weight waste collection system, and other examples from across the EU. Instructors: The principal instructor for this course is: John Lynham Department of Economics lynham@hawaii.edu office hours: Tuesdays and Thursdays 2:00-3:00pm or by appt. *An easy way to remember my office hours is Two-Tue-Thu! Student Learning Outcomes The course is designed to enhance the student s ability to understand economic concepts and models and to assess their relevance to environmental issues and policies. After completion of the course, students should be able to: (1) List and explain the major differences in climate change policy between the EU and the US (2) Rigorously evaluate the economic impacts of environmental policies in the EU (3) Discuss why the market-based approach has been embraced for some environmental problems in the EU (such as carbon emissions) but vigorously opposed for others (overfishing) (4) Communicate with professionals working on environmental policy in the EU (5) Advise fellow students from other countries on the pros and cons of market-based approaches to the environment Prerequisites, Course Requirements and Grading: To enroll in this course, students must have already taken either Economics 120, 130 or 131. Students who have not taken the prerequisite may be allowed to take the class with the consent of the instructor. 1

2 This is a three-unit course. The course requirements and grading weights are: requirement date weight in overall grade Five 1-page written assignments TBD 20% 50-minute midterm TBD 15% 2-hour final exam TBD 35% Research paper TBD 30% I will also be providing problem sets approximately once a week. These will not be graded and are not to be turned in. Their purpose is simply to help you focus your studies and learn the material more effectively. Writing Assignments In the research paper, you should apply the concepts and analytical tools from the course to analyze and evaluate a current or potential environmental policy in the European Union. The paper should be at least 12 pages in length. Guidelines for preparing and writing the research paper are explained in a separate document. There will be five 1-page critical analysis assignments during the semester. These will be on environmental economics topics that are currently in the news. I want you to write each assignment in the style of an article in The Economist. This means I want you to draw the reader in with a clear and concise style, explain how economic concepts apply to the policy issue at hand, take a side on the issue and explain the reasoning for your position. The Economist tends to take a center-right libertarian stance on most issues but I will not require you to do this: you can take any position you want but I want the style of your article to mimic The Economist. You will find The Economist s Style Guide extremely useful in this regard: Students may not take the course on a pass-fail basis. Students must take each exam on the date scheduled. Exam dates will not be changed for individual students to accommodate job interviews, family events, etc. Exceptions will be made only for serious medical reasons or in the event of a death in the family. If a student athlete must be off-campus the day of an exam, s/he must take the exam on the same date and supply his/her answers by or fax on that date. Any student who feels s/he may need an accommodation based on the impact of a disability is invited to contact me privately. I would be happy to work with you, and the KOKUA Program (Office for Students with Disabilities) to ensure reasonable accommodations in my course. KOKUA can be reached at (808) or (808) (voice/text) in room 013 of the Queen Lili'uokalani Center for Student Services. I know from personal experience how useful the services KOKUA provides can be, so please don t be shy about contacting me. Ethics This course has a Contemporary Ethical Issues (E) Focus designation. Contemporary ethical issues are fully integrated into the main course material (lectures, discussions and assignments). Ethical issues overlap heavily with normative economics (what should be) as opposed to positive economics (explaining how things work). Economic notions of value will be compared and contrasted with other ethical 2

3 judgments of value. We will also have classroom discussion and debate about contemporary environmental issues. II. LECTURE OUTLINE AND READING LIST The readings listed below are required. Ideally, they should be completed prior to the lectures with which they are listed. Nearly all of the readings are in the course reader. The few readings not included in the reader will be made available on Laulima. There is no required textbook for the course, but I recommend purchasing Environmental Economics (2 nd Edition) by Charles D. Kolstad (ISBN13: , Price: $99). A less technical textbook is Environmental and Natural Resource Economics by Tom Tietenberg and Lynne Lewis. You should be able to purchase this online. The latest edition is most policy-relevant but other editions should suffice. 1. Introduction and Framework for Analysis Introduction: Course Topics Some Background: Trends in Environmental Policy and Quality Worldwatch Institute, Vital Signs 2011, Energy and Environment Trends, pp European Environment Agency, Trends and projections in Europe Externalities, Market Failures, and Welfare I: Nature of Market Failure Efficiency Impacts of Alternative Policy Instruments Callan, Scott J. and Janet M. Thomas, Environmental Economics and Management (third edition), Thomson South-Western, Ch. 3, pp ; ch. 5, pp (On Coursework.) Goulder, Lawrence. Impacts of Emissions Taxes, Abatement Subsidies, and Mandated Technologies. Notes prepared for Economics 155, December Externalities, Market Failures, and Welfare II: Distributional Considerations Tradable Emissions Allowances 2. Local and Regional Air Pollution Problems Tradable Emissions Allowances in Practice Ellerman, A. D., & Buchner, B. K. (2007). The European Union emissions trading scheme: origins, allocation, and early results. Review of environmental economics and policy, 1(1), Government Intervention Reconsidered: The Coase Theorem Kolstad, Environmental Economics, Chapter 13 Property Rights 3

4 Goodstein, Eban, Economics and the Environment (fifth edition), ch. 4, sections (pp ). (On Coursework.) Local and Regional Pollution Control Policy: General Conclusions 3. Global Environmental Problems: The Greenhouse Effect, Stratospheric Ozone Depletion, and Transnational Acid Rain Deposition Economic Perspectives on the Prospect of Global Climate Change Global Climate Change: Domestic Policy Options Perspectives on Recent EU Climate Policy Initiatives & Comparison to US Initiatives Böhringer, C., Löschel, A., Moslener, U., & Rutherford, T. F. (2009). EU climate policy up to 2020: An economic impact assessment. Energy Economics, 31, S295-S305. Goulder, Lawrence. California s Bold New Climate Policy. Economists Voice 4(3), (On Coursework.) Burtraw, Dallas, Art Fraas, and Nathan Richardson. Greenhouse Gas Regulation under the Clean Air Act: A Guide for Economists. Review of Environmental Economics and Policy 5(2), Summer (On Coursework.) Environmental Policymaking under Uncertainty International Aspects of Environmental Problems: Acid Rain in Europe International Approaches to Addressing Global Climate Change Nordhaus, William. To Tax or Not to Tax: Alternative Approaches to Slowing Global Warming. Review of Environmental Economics and Policy 1(1), Winter Excerpt: pages (On Coursework.) Olmstead, Sheila, and Robert N. Stavins. Three Key Elements of a Post-2012 International Climate Policy Architecture. Review of Environmental Economics and Policy 6(1), Winter (On Coursework.) [Goulder, Lawrence H., and Brian Nadreau. International Approaches to Reducing Greenhouse Gas Emissions, in S. Schneider, A. Rosencrantz, and J. Niles, eds., Climate Change Policy: A Survey, Island Press, Note: There is a mistake in footnote 21 the US is not worse off under an emissions trading program.] 4. Environmental Issues in Developing Countries Sustainable Development: Defining and Measuring Sustainability Solow, Robert M. Sustainability: An Economist s Perspective, in Robert N. Stavins, ed., 4

5 Economics of the Environment: Selected Readings, fourth edition (London: W.W. Norton), 2000, pp Arrow, Kenneth, et al., Are We Consuming Too Much? Journal of Economic Perspectives Summer pp Wackernagel, Mathis, et al., Tracking the Ecological Overshoot of the Human Economy, Proceedings of the National Academy of Sciences July 9, 2002, pp Sources of Unsustainable Economic Paths; Policies to Promote Sustainability Managing local commons Elinor Ostrom (2009) A General Framework for Analyzing Sustainability of Social-Ecological Systems Science 325, (On Coursework.) Ostrom, Elinor (1990) Governing the Commons: the Evolution of Institutions for Collective Action Cambridge University Press. (On Coursework.) 5. Open Access Problems, Overharvesting, and Extinction Fisheries I: Open Access, Market Failure, and Government Failure Pauly, Daniel. Aquapalypse Now: The End of Fish. The New Republic, September 28, (On Coursework.) Princen, S. (2010). Venue shifts and policy change in EU fisheries policy. Marine Policy, 34(1), Fisheries II: Addressing the Market Failure Goulder, Lawrence H., A Framework for Analyzing Fisheries Problems and Policy Options, notes prepared for Economics 155, March Fisheries III: Policy Options Schein, Andrew, Owning a Piece of a Fishery: The Tradable Permits Approach in Alaska s Halibut Fishery (On Coursework) Levy, Sharon. Catch Shares Management. BioScience, November (On Coursework.) Costello, Gaines and Lynham. (2008) Can Catch Shares Prevent Fisheries Collapse?. Science, 321(5896): (On Coursework.) 6. Valuing the Environment Valuing Nature: Philosophical Issues Empirical Methods for Valuing Environmental Amenities I: Hedonic Method Protecting Ecosystem Services 5

6 Goulder, Lawrence H., and Donald Kennedy. Interpreting and Estimating the Value of Ecosystem Services, in Gretchen Daily et al., eds., Natural Capital: Theory & Practice of Mapping Ecosystem Services. Oxford: Oxford University Press, Mendelsohn, Robert, William Nordhaus, and Daigee Shaw, The Impact of Global Warming on Agriculture: A Ricardian Analysis. American Economic Review 84(4), September Empirical Methods for Valuing Environmental Amenities II: Travel Cost Method, Contingent Valuation Valuing Statistical Lives 7. Water Goodstein, op. cit., ch. 8. (On Coursework.) Goulder, Lawrence H., Notes on the Travel Cost Method. Notes prepared for Economics 155, March Three Symposium articles from the Fall 1994 Journal of Economic Perspectives: Portney, Paul R., The Contingent Valuation Debate: Why Economists Should Care; W. Michael Hanemann, Valuing the Environment through Contingent Valuation; and Peter A. Diamond and Jerry Hausman, Contingent Valuation: Is Some Number Better than No Number? Three articles from the Fall 2012 Journal of Economic Perspectives: From Exxon to BP: Has Some Number Become Better than No Number? Catherine L. Kling, Daniel J. Phaneuf, and Jinhua Zhao, Contingent Valuation: A Practical Alternative when Prices Aren t Available Richard T. Carson, Contingent Valuation: From Dubious to Hopeless, Jerry Hausman (On Coursework) Water pollution policies Policies for Dealing with Water Scarcity Problems 8. Population Growth, the Environment, and the Long Run Population Growth: Sources and Policy Options Population, Technology, and Long-Run Perspectives on Environmental Degradation Bongaarts, John. Population Policy Options in the Developing World, Science 263, 11 February Conclusions The Environmental Future: Key Analytical Themes, Key Policy Challenges 6